Friday, November 2, 2012

Reliance v/s Arvind Kejriwal

Arvind Kejriwal's latest allegations against Reliance have rather serious implications for the Indian Economy.

The Allegations

Arvind Kejriwal has this time targeted the biggest industrial establishment of India - Reliance Industries Ltd. He has claimed that Mukesh Ambani used his financial clout to manipulate government policies and wrongfully renegotiate the price at which his company Reliance Industries sells gas to the government.He has even alleged that Reliance is infact blackmailing the government to increase the rate by more than 3 times.

He further charged that 2 ministers were moved out of the Oil Ministry for their stand against Reliance's request.

If the allegations are true then below are the Implications - As I see them

There are ministers who are not willing to give into the pressure from biggies like Mukesh Ambani.

The increased cost will be passed on to the common man in the form of higher taxes and / or tariffs.

If the jump in prices, as sought by Reliance, goes through - the cost of electricity and fertilizers is going to shoot through the roof.

Reliance will make a huge-huge profit. It is already making profits at the current prices - the entire threefold jump will be pocketed by the company.

If the allegation are not true then It will spoil the industrial environment of the country.